Dairy

Woolworths leads on milk levy

By Country News

Generic milk will cost consumers an extra 10¢/litre, with Woolworths and Coles announcing a milk levy to help drought-affected farmers.

A special drought relief range will hit Woolworths’ shelves in mid-October, with full-cream and low-fat milk costing $2.20 for two litres and $3.30 for three litres.

Until the range arrives, Woolworths said it would increase the cost of its 3litre bottles of milk.

The retailer said money raised would go to its supplier, Parmalat.

The processor will distribute the money on a monthly basis among its farmer suppliers, with the assistance of a drought relief oversight committee, which will include an independent auditor and dairy industry representative.

Woolworths fresh food director Paul Harker acknowledged dairy farmers were ‘‘doing it tough’’ but said the price rise would not solve ‘‘wider structural issues’’ in the industry.

Coles also increased the price of its 3litre home-brand milk to $3.30 until the end of the year, with the additional 30¢ to be donated to the National Farmers’ Federation’s Drought Relief Fund.

Despite welcoming the milk price rise, UDV president Adam Jenkins labelled the increase ‘‘a Bandaid’’ and said more work must be done to permanently increase the cost of dairy products.

He also echoed calls for more clarification about how the funds would be distributed and whether they would apply to all dairy farmers, including those who supplied cheese and yoghurt processors.

‘‘We need a long-term solution,’’ Mr Jenkins said.

‘‘(Woolworths and Coles) started the ‘down, down’ campaign, they caused the price drop and now they’re taking the opportunity to get a good PR bump ... it’s disappointing.’’

Mr Jenkin’s views were echoed by Australian Dairy Farmers president Terry Richardson, who also urged Woolworths to include ADF on its drought relief oversight committee.

‘‘You can’t justify a situation where a litre of milk is being sold on supermarket shelves for less than a litre of water and this practice must stop,’’ he said.

The wholesale price of all Dairy Farmers and Pura milks will also be raised 10¢/litre, processor Lion has announced, with the funds to be returned to farmers.

Federal Agriculture Minister David Littleproud applauded the announcement.